It’s the constant drumbeat of “AI will take your job.”
It’s the constant news of “layoffs because AI makes us more productive.”
It’s the constant background discussion of UBI because no one will have jobs anymore.
It’s knowing that, in the US, UBI will never come.
It’s the feeling that the billionaires of Silicon Valley are getting rich and there isn’t even a “learn to code” path to wealth anymore.
It’s knowing that data centers will create problems in your neighborhood: the price of power and water will go up, the amount of undeveloped land down, and you don’t even get jobs out of it.
For fuck’s sake, it’s not about the thousands of Mag7 tech workers losing their jobs. That’s just a symptom, like all the other symptoms, of this weirdly dystopian future that the AI companies keep telling us is inevitable.
SWE layoffs are politically irrelevant. The kids booing commencement speakers, however, are not aspiring SWEs. AI CEOs’ rhetoric, in particular, Altman’s, has been aimed and successfully landed more broadly.
And I don’t think the underlying cause of the anxiety is unemployment, which remains relatively low. Finding a block of hard-working workers who used to be able to make ends meet, but now can’t, is a political goldmine for good reason.
How different would AI sentiment be if this never happened?
It wouldn't exist.
Who would buy this?
Show me any "little guy" suddenly competing with the "big guys" due to "AI." Any single examples? Remember the dawn of the internet? Where this very thing was happening every day?
The writing is on the wall. People imagine they're going to turn their $2500 computer into a butler and never work again so their brains are just shut off to the obvious.
So for the Mag7 it's kinda AI, in that they want to maintain margins and invest loads more into capital for AI infrastructure. Those layoffs clearly have AI associated with them.
For lots of other tech, I'm not sure. I do believe that productivity can increase in a bunch of places with AI tooling, but you need to build that tooling first, then monitor and ensure that it continues working. Like, the vast majority of tech companies already outsourced a lot of what AI tooling would/could do, so I'm somewhat sceptical of the rationale (AI is so good we can cut 20% of our staff).
It might be literally impossible but that's what the numbers are.
(That can of course change very quickly, yes)
I think investors are starting to see stress on the market for fewer working people contributing back as customers and investors themselves. This creates depreciation in share value as no one is willing to invest.
At the very top are the big investment banks and fund houses, berkshire. Second are smaller institutions and third retail/individual.
The top two layers demand a steady return, never losing money on average in any 36 month window. Otherwise it triggers a selloff top down to cover for it.
The bottom follows the top so the selloff or buy just gets mimicked, with the top tier never losing (the bottom layers make sure of it by following blindly)
With wild indicators already set a massive selloff should have already been in motion, but its not. The top tier is getting more greedy.
No one is betting on AI long term. Everyone's in for the ride. As always the bottom will feed the top.
Nvidia is worth so much if it fails it takes investments with it. The risk is too high.
It seems that ROI has become more important in the last 5 years, but then again you have these Space or Rare Earth shitcos trading at -200x PE while all of their industrial promise is directly undermined by rising costs from AI.
The likely forecast for this year is either rate hikes combined with further labor market deterioration and consumption somehow going negative, or inflation eating up all of the (still non existent) profits from AI mega caps themselves.
It’s hard to see how this ends well without a lowered cost of capital or more interest in taking on capex risk, which seems frankly unlikely. The worst case scenario seems to be a lot of bad debt with nobody except for perhaps Berkshire or China who would be interested or capable when it comes to salvaging it. Armchair economist here, grain of salts a plenty.